In a recent twist of events, Bitcoin prices have tumbled to a nearly two-month low, sending ripples of concern through the crypto market. However, amidst this downturn, a prominent Bloomberg analyst points to a silver lining on the horizon for the leading cryptocurrency.
Mike McGlone, a senior Macro strategist at Bloomberg, has taken to Twitter to expound on his analysis of Bitcoin’s potential rebound. In an intriguing graphical representation, he shows that record-low volatility may herald an eventual resurgence, leading to a likely price pump.
Are Big Bitcoin Pumps Done? Mainstream, Stablecoin Trajectory – #Bitcoin volatility is declining along with most assets in 2023, and the mainstream migration process is likely to entail diminishing risk for the #crypto — and limited price-pump potential. Divergent Bitcoin and… pic.twitter.com/h5EH6EwNiL
— Mike McGlone (@mikemcglone11) August 17, 2023
One of the most striking revelations lies in the 180-day volatility, which nosedived to an astounding 46% on August 16, marking an unprecedented low. McGlone emphasizes that this dramatic decline in volatility is further magnified when comparing Bitcoin’s behavior to traditional stock indices since the beginning of the year.
McGlone postulates that Bitcoin’s volatility could stage a resurgence, especially if the S&P 500 takes a divergent path and experiences a decline. This theory stems from the observation that market volatility often escalates when the S&P 500 retraces.
Despite Bitcoin’s recent price drop, its evolving role as digital gold remains a driving force. Interestingly, Bitcoin’s volatility, while around three times that of the precious metal, still has room to decrease. McGlone draws attention to the fact that Bitcoin once traded at ten times the risk of gold in 2018, underscoring the cryptocurrency’s maturation over time. Bitcoin’s value is $26,438, marking a 7.13% decline over the past 24 hours, according to CoinMarketCap.
In a paradoxical turn, the unwavering conviction of Bitcoin investors has remained resolute, with only a few opting to liquidate their holdings. The supply held by steadfast long-term holders continues to surge, achieving an all-time high of 14.6 million BTC. In sharp contrast, the supply held by short-term holders has dwindled to a multi-year low of 2.56 million BTC.
As the crypto market navigates these uncharted waters of fluctuating volatility and shifting investor sentiment, all eyes remain locked on Bitcoin’s next move, anticipating whether McGlone’s predictions will lead to brighter days for this pioneering digital asset.
